##### Table of Contents



UNITED STATES
U.S. SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
 For
the transition period from to.
 Commission File Number 0-51110
 VIACELL, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware(State or Other Jurisdiction of Incorporation or 
Organization)
    
    04-3244816(I.R.S. Employer Identification No.)245 First Street, Cambridge, MA(Address of Principal Executive Offices)
    
    02142(Zip Code)
 (617) 914-3400  (Registrants telephone number, including area code)
 
 þ o
  o þ o
 o þ




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##### Table of Contents



ViaCell, Inc.
Quarterly Report on Form 10-Q
For the Fiscal Quarter Ended September 30, 2007
 NOTE ABOUT REFERENCES TO VIACELL
  NOTE ABOUT TRADEMARKS
 ® ® sm tm ® ® ® tm ® ®
 NOTE ABOUT FORWARD-LOOKING STATEMENTS
  2




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##### 



TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (unaudited)Condensed
Consolidated Balance Sheets -- September 30, 2007 and December 31, 2006
    
    4Condensed
Consolidated Statements of Operations -- Three and Nine months ended September 30, 2007 and September 30, 2006
    
    5Condensed
Consolidated Statements of Comprehensive Loss -- Three and Nine months ended September 30, 2007 and September 30, 2006
    
    6Condensed
Consolidated Statements of Cash Flows --Nine months ended September 30, 2007 and September 30, 2006
    
    7Notes to Condensed Consolidated Financial Statements
    
    8Item 2.
    
    Managements
Discussion and Analysis of Financial Condition and Results of Operations
    
    16Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    27Item 4.
    
    Controls and Procedures
    
    28PART II  OTHER INFORMATIONItem 1.
    
    Legal Proceedings
    
    28Item 1A.
    
    Risk Factors
    
    28Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    46Item 3.
    
    Defaults upon Senior Securities
    
    47Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    47Item 5.
    
    Other Information
    
    47Item 6.
    
    Exhibits
    
    47Signatures
    
    48EXHIBITSIndex to Exhibits
    
    49EX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO
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PART I  FINANCIAL INFORMATION
 
 Item 1  Financial Statements
 ViaCell, Inc.
 
 Condensed Consolidated Balance Sheets
(amounts in thousands except share and per share data)
(unaudited)
 September 30,
    
    
    December 31,2007
    
    
    2006ASSETSCurrent assets:Cash and cash equivalents
    
    $
    14,598
    
    
    $
    18,039Short-term investments
    
    
    28,689
    
    
    
    33,206Accounts receivable, less allowances of
$2,314 and $1,787 at September 30, 2007 and
December 31, 2006, respectively
    
    
    15,476
    
    
    
    12,616Prepaid expenses and other current assets
    
    
    1,783
    
    
    
    2,008Total current assets
    
    
    60,546
    
    
    
    65,869Property and equipment, net
    
    
    7,756
    
    
    
    8,376Goodwill
    
    
    3,621
    
    
    
    3,621Intangible assets, net
    
    
    2,470
    
    
    
    2,621Restricted cash
    
    
    1,795
    
    
    
    1,795Total assets
    
    $
    76,188
    
    
    $
    82,282LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Current portion of long-term debt obligations
    
    $
    41
    
    
    $
    55Accounts payable
    
    
    930
    
    
    
    960Accrued expenses
    
    
    10,703
    
    
    
    9,550Deferred revenue
    
    
    9,111
    
    
    
    7,300Total current liabilities
    
    
    20,785
    
    
    
    17,865Deferred revenue
    
    
    19,705
    
    
    
    14,666Deferred rent
    
    
    3,040
    
    
    
    3,252Contingent purchase price
    
    
    6,000
    
    
    
    8,155Long-term debt obligations, net of current portion
    
    
    9
    
    
    
    27Total liabilities
    
    
    49,539
    
    
    
    43,965Commitments and contingencies (Note 5)Stockholders equity:Preferred stock, $0.01 par value; authorized
5,000,000 shares at September 30, 2007 and
December 31, 2006, none outstanding
    
    
    
    
    
    
    Common stock, $0.01 par value; authorized
100,000,000 shares at September 30, 2007 and
December 31, 2006; issued and outstanding
38,837,620 and 38,525,036 shares at September 30,
2007 and December 31, 2006, respectively
    
    
    388
    
    
    
    385Additional paid-in capital
    
    
    234,655
    
    
    
    232,215Accumulated deficit
    
    
    (208,531
    )
    
    
    (194,490
    )Accumulated other comprehensive income
    
    
    137
    
    
    
    207Total stockholders equity
    
    
    26,649
    
    
    
    38,317Total liabilities and stockholders equity
    
    $
    76,188
    
    
    $
    82,282
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ViaCell, Inc.
 
 Condensed Consolidated Statements of Operations
(amounts in thousands, except per share data)
(unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Processing and storage revenues
    
    $
    18,004
    
    
    $
    14,466
    
    
    $
    48,096
    
    
    $
    39,765Grant revenues
    
    
    
    
    
    
    201
    
    
    
    95
    
    
    
    521Total revenues
    
    
    18,004
    
    
    
    14,667
    
    
    
    48,191
    
    
    
    40,286Operating expenses:Cost of processing and storage revenues
    
    
    2,974
    
    
    
    2,893
    
    
    
    8,237
    
    
    
    7,757Research and development
    
    
    2,835
    
    
    
    3,570
    
    
    
    8,824
    
    
    
    10,696Sales and marketing
    
    
    12,375
    
    
    
    9,901
    
    
    
    35,404
    
    
    
    27,818General and administrative
    
    
    4,427
    
    
    
    4,474
    
    
    
    13,542
    
    
    
    14,124In-process technology
    
    
    
    
    
    
    
    
    
    
    (2,155
    )
    
    
    Restructuring
    
    
    
    
    
    
    (890
    )
    
    
    267
    
    
    
    (1,070
    )Total operating expenses
    
    
    22,611
    
    
    
    19,948
    
    
    
    64,119
    
    
    
    59,325Loss from operations
    
    
    (4,607
    )
    
    
    (5,281
    )
    
    
    (15,928
    )
    
    
    (19,039
    )Interest income (expense):Interest income
    
    
    578
    
    
    
    827
    
    
    
    1,889
    
    
    
    2,354Interest expense
    
    
    (1
    )
    
    
    (8
    )
    
    
    (2
    )
    
    
    (50
    )Total interest income, net
    
    
    577
    
    
    
    819
    
    
    
    1,887
    
    
    
    2,304Loss from operations before cumulative effect of
change in accounting principle
    
    
    (4,030
    )
    
    
    (4,462
    )
    
    
    (14,041
    )
    
    
    (16,735
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    283Net loss
    
    $
    (4,030
    )
    
    $
    (4,462
    )
    
    $
    (14,041
    )
    
    $
    (16,452
    )Net loss per share:Basic and diluted net loss per share before
cumulative effect of change in accounting
principle
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.36
    )
    
    $
    (0.44
    )Cumulative effect of change in accounting principle
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    0.01Basic and diluted net loss per common share
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.36
    )
    
    $
    (0.43
    )Weighted average shares used in basic and diluted
net loss per share computation
    
    
    38,836
    
    
    
    38,377
    
    
    
    38,762
    
    
    
    38,345
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ViaCell, Inc.
 
 Condensed Consolidated Statements of Comprehensive Loss
(amounts in thousands)
(unaudited)
 Three Months Ended
    
    
    Nine Months EndedSeptember 30,
    
    
    September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Net loss
    
    $
    (4,030
    )
    
    $
    (4,462
    )
    
    $
    (14,041
    )
    
    $
    (16,452
    )Foreign currency translation adjustment
    
    
    (94
    )
    
    
    (28
    )
    
    
    (70
    )
    
    
    (17
    )Comprehensive loss
    
    $
    (4,124
    )
    
    $
    (4,490
    )
    
    $
    (14,111
    )
    
    $
    (16,469
    )
  6




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ViaCell, Inc.
 
 Condensed Consolidated Statements of Cash Flows
(amounts in thousands)
(unaudited)
 Nine Months EndedSeptember 30,2007
    
    
    2006Cash flows from operating activities:Net loss
    
    $
    (14,041
    )
    
    $
    (16,452
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization
    
    
    1,702
    
    
    
    1,687Cumulative effect of change in accounting principle
    
    
    
    
    
    
    (283
    )Stock-based compensation
    
    
    1,849
    
    
    
    2,285Non-cash disposal of property and equipment
    
    
    269
    
    
    
    45Warrant expense
    
    
    19
    
    
    
    Non-cash credit to in-process technology
    
    
    (2,155
    )
    
    
    Reserve for bad debt
    
    
    960
    
    
    
    1,090Tenant improvement allowance
    
    
    
    
    
    
    60Changes in assets and liabilities:Accounts receivable
    
    
    (3,819
    )
    
    
    18Prepaid expenses and other current assets
    
    
    224
    
    
    
    (424
    )Accounts payable
    
    
    (30
    )
    
    
    (449
    )Accrued expenses
    
    
    1,153
    
    
    
    1,887Deferred revenue
    
    
    6,850
    
    
    
    5,024Deferred rent
    
    
    (213
    )
    
    
    (854
    )Net cash used in operating activities
    
    
    (7,232
    )
    
    
    (6,366
    )Cash flows from investing activities:Purchases of property and equipment
    
    
    (1,199
    )
    
    
    (1,405
    )Proceeds from the sale of equipment
    
    
    
    
    
    
    25Proceeds from maturities of investments
    
    
    50,225
    
    
    
    37,482Purchase of investments
    
    
    (45,708
    )
    
    
    (39,214
    )Decrease in restricted cash
    
    
    
    
    
    
    158Net cash provided by (used in) investing activities
    
    
    3,318
    
    
    
    (2,954
    )Cash flows from financing activities:Proceeds from exercise of stock options
    
    
    575
    
    
    
    57Proceeds from refund of security deposit
    
    
    
    
    
    
    443Repayments on credit facilities
    
    
    
    
    
    
    (1,333
    )Payments on capital lease principal
    
    
    (32
    )
    
    
    (50
    )Net cash provided by (used in) financing activities
    
    
    543
    
    
    
    (883
    )Effect of change in exchange rates on cash
    
    
    (70
    )

    
    
    42Net decrease in cash and cash equivalents
    
    
    (3,441
    )
    
    
    (10,161
    )Cash and cash equivalents, beginning of period
    
    
    18,039
    
    
    
    33,138Cash and cash equivalents, end of period
    
    $
    14,598
    
    
    $
    22,977
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ViaCell, Inc.
 
 Notes to Condensed Consolidated Financial Statements
 (unaudited)
 1. Organization, Nature of Business and Merger Agreement
 sm
   8




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2. Summary of Significant Accounting Policies
 Basis of Presentation
  Use of Estimates
  Stock-Based Compensation
  Net Loss Per Common Share
  9




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Three Months Ended September 30,
    
    
    Nine Months Ended September 30,2007
    
    
    2006
    
    
    2007
    
    
    2006Basic and diluted net loss per shareNet loss
    
    $
    (4,030
    )
    
    $
    (4,462
    )
    
    $
    (14,041
    )
    
    $
    (16,452
    )Weighted average number of
common shares outstanding
    
    
    38,836
    
    
    
    38,377
    
    
    
    38,762
    
    
    
    38,345Basic and diluted net loss per share
    
    $
    (0.10
    )
    
    $
    (0.12
    )
    
    $
    (0.36
    )
    
    $
    (0.43
    )
  Three Months Ended September 30,
    
    Nine Months Ended September 30,2007
    
    2006
    
    2007
    
    2006Options
    
    
    4,271
    
    
    
    4,270
    
    
    
    4,011
    
    
    
    4,049Warrants
    
    
    1,193
    
    
    
    1,443
    
    
    
    1,216
    
    
    
    1,597
 In-Process Research and Development Expense
  Recent Accounting Pronouncements
  10




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3. Accrued Expenses
  September 30,
    
    
    December 31,2007
    
    
    2006Payroll and payroll related
    
    $
    1,656
    
    
    $
    1,904Management incentive
    
    
    897
    
    
    
    1,047Professional fees
    
    
    2,431
    
    
    
    1,829Accrued marketing
    
    
    3,676
    
    
    
    2,079Accrued restructuring
    
    
    21
    
    
    
    Deferred rent, current
    
    
    357
    
    
    
    345Accrued taxes
    
    
    256
    
    
    
    459Other
    
    
    1,409
    
    
    
    1,887Accrued expenses
    
    $
    10,703
    
    
    $
    9,550
 4. Income Taxes
  11




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12




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5. Commitments and Contingencies
 Agreements
 ® ®
   13




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14




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Litigation
      15




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ITEM
2. MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
  Overview and Merger Agreement
    16




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Revenues
   17




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Operating Expenses
    18




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Results of Operations  Three and Nine Months Ended September 30, 2007 and 2006 (table amounts in thousands)
 Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    
    September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeProcessing revenues
    
    $
    14,383
    
    
    $
    11,714
    
    
    
    23
    %
    
    $
    37,759
    
    
    $
    32,146
    
    
    
    17
    %Storage revenues
    
    
    3,621
    
    
    
    2,752
    
    
    
    32
    %
    
    
    10,337
    
    
    
    7,619
    
    
    
    36
    %Total processing
and storage
revenues
    
    
    18,004
    
    
    
    14,466
    
    
    
    24
    %
    
    
    48,096
    
    
    
    39,765
    
    
    
    21
    %Grant revenues
    
    
    
    
    
    
    201
    
    
    
    (100
    )%
    
    
    95
    
    
    
    521
    
    
    
    (82
    )%Total revenues
    
    $
    18,004
    
    
    $
    14,667
    
    
    
    23
    %
    
    $
    48,191
    
    
    $
    40,286
    
    
    
    20
    %
   Three Months Ended September 30,
    
    
    
    
    

Nine Months Ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeCost of processing
and storage
revenues
    
    $
    2,974
    
    
    $
    2,893
    
    
    
    3
    %
    
    $
    8,237
    
    
    $
    7,757
    
    
    
    6
    %
  Three Months Ended September 30,
    
    
    
    
    
    Nine Months Ended September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeResearch and development
    
    $
    2,835
    
    
    $
    3,570
    
    
    
    (21
    %)
    
    $
    8,824
    
    
    $
    10,696
    
    
    
    (18
    %)
 19




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Three Months Ended
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeSales and marketing
    
    $
    12,375
    
    
    $
    9,901
    
    
    
    25
    %
    
    $
    35,404
    
    
    $
    27,818
    
    
    
    27
    %
  Three Months Ended
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeGeneral and administrative
    
    $
    4,427
    
    
    $
    4,474
    
    
    
    (1
    %)
    
    $
    13,542
    
    
    $
    14,124
    
    
    
    (4
    %)
   Three Months Ended
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    

September 30,2007
    
    2006
    
    Change
    
    2007
    
    2006
    
    ChangeRestructuring
    
    $

    
    
    
    
    (890
    )
    
    
    100
    %
    
    $
    267
    
    
    $
    (1,070
    )
    
    
    (125
    %)
 20




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Three Months Ended
    
    
    
    
    
    
    Nine Months EndedSeptember 30,
    
    
    
    
    
    

September 30,2007
    
    
    2006
    
    
    Change
    
    
    2007
    
    
    2006
    
    
    ChangeInterest income
    
    $
    578
    
    
    $
    827
    
    
    
    (30
    )%
    
    $
    1,889
    
    
    $
    2,354
    
    
    
    (20
    %)Interest expense
    
    
    (1
    )
    
    
    (8
    )
    
    
    88
    %
    
    
    (2
    )
    
    
    (50
    )
    
    
    96
    %Total interest income, net
    
    $
    577
    
    
    $
    819
    
    
    
    (30
    )%
    
    $
    1,887
    
    
    $
    2,304
    
    
    
    (18
    %)
   Liquidity and Capital Resources
   Nine Months Ended
    
    Nine Months EndedSeptember 30,
    
    September 30,2007
    
    2006
    
    $ ChangeNet cash used in operating activities
    
    $
    (7.2
    )
    
    $
    (6.4
    )
    
    $
    (0.8
    )Net cash provided by (used in) investing activities
    
    
    3.3
    
    
    
    (3.0
    )
    
    
    6.3Net cash provided by (used in) financing activities
    
    
    0.5
    
    
    
    (0.9
    )
    
    
    1.4Cash and cash equivalents, end of period
    
    $
    14.6
    
    
    $
    23.0
    
    
    $
    (8.4
    )
 Operating Activities
  21




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Investing Activities
  Financing Activities
   Off
Balance Sheet Arrangements
  22




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Other Arrangements
 EMD Serono, Inc .
  Mothers Work Data and Marketing Services Agreement
  Miltenyi
  23




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Legal Proceedings
    24




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Critical Accounting Estimates
  25




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Accounting for Stock-Based Compensation
   Recent Accounting Pronouncements
   26




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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 Investment Risk
  Foreign Exchange Risk
  Interest Rate Risk
  27




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ITEM 4. CONTROLS AND PROCEDURES
   
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL PROCEEDINGS
  
 ITEM 1A. RISK FACTORS
  28




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We may be subject to a number of risks and uncertainties if the proposed merger with PerkinElmer
fails to close.
   
    
    if the merger agreement is terminated, we may be required in specific
circumstances, to pay a termination fee of up to $8.5 million to
PerkinElmer,
    
    the price of our common stock may decline to the extent that the
current market price reflects an assumption that the merger will be
completed, and
    
    we must pay our expenses related to the merger, including substantial
legal and accounting fees, even if the merger is not completed. This
could affect our results of operations for the period during which the
fees are incurred.
  We may not achieve our goal of becoming cash flow positive and may never become profitable.
  29




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
    
    our ability to increase sales of our cord blood service offerings
particularly in the face of significant competition;
    
    continued acceptance in the marketplace for family cord blood banking
and the overall growth of the family cord blood banking category;
    
    the impact of any unexpected issues or failures related to the
collection, processing or storage of umbilical cord blood by us or
others in the industry;
    
    the impact of any potential adverse outcome in the patent infringement
lawsuits brought against us by PharmaStem, including legal expenses,
and the material impact on our business if PharmaStem were able to
obtain an injunction;
    
    the level of our expenses, including as a result of difficulties or
delays related to our research and development programs, and any
unexpected expenses; and
    
    the overall net impact on revenues and expenses of new licensing
deals, collaborations or other strategic efforts.
  We may not be able to sustain our current level of revenues or our recent growth rates.
  30




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If we do not prevail in the PharmaStem litigation, we may be prevented from selling our cord blood
banking service offerings or may have to incur significant expenses.
     31




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A third party may again seek to challenge the arbitrators decision related to our agreement with
Mothers Work.
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If we are not able to successfully develop and commercialize new products, our future prospects may
be limited.
      We may not be able to successfully develop our ViaCyte oocyte cryopreservation product candidate.
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in vitro
 We may not be able to raise additional funds necessary to fund our operations.
   
    
    the level of cash flows from sales of our cord blood banking service offerings;
    
    the costs of increasing or expanding our cord blood banking sales and marketing efforts;
    
    the scope and results of our research and development programs;
    
    the clinical pathway for each of our product candidates, including the number,
size, scope and cost of clinical trials required to establish safety and
efficacy;
    
    the results of litigation, other disputes and any liability that results from
our identification of certain job classifications that may be subject to
possible challenge;
    
    the costs associated with expanding our portfolio of product candidates through
licensing, collaborations or acquisitions;
    
    the costs of research and development work focused on developing clinical and
commercial scale processes for manufacturing cellular products and, if we
advance our products, the costs of building and operating our manufacturing
facilities, both to support our clinical activities and also in anticipation of
growing our commercialization activities;
    
    funds spent in connection with acquisitions of related technologies or
businesses, including contingent payments that may be made in connection with
our acquisition of Kourion Therapeutics;
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
    
    the costs of maintaining, expanding and protecting our intellectual property
portfolio, including litigation costs and liabilities; and
    
    our ability to establish and maintain collaborative arrangements and obtain
milestones, royalties and other payments from collaborators.
  We depend on patents and other proprietary rights that may fail to protect our business.
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Third parties may own or control patents or patent applications that are infringed by our
technologies or product candidates.
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Our success will depend in part on establishing and maintaining effective strategic partnerships
and collaborations.
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Our cell preservation activities are subject to regulations that may impose significant costs and
restrictions on us.
 Cord blood preservation.
  Oocyte cryopreservation.
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We have only limited experience manufacturing cell therapy product candidates, and we may not be
able to manufacture our product candidates in quantities sufficient for clinical studies or for
commercial scale.
  We are dependent upon third parties to supply us with certain components of our cell therapy
product candidates, the loss of which may delay development of our product candidates.
   Our inability to have ViaCyte consistently manufactured to specifications or the loss of our
contract manufacturer may delay development of our ViaCyte product candidate.
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We are dependent on our existing suppliers to successfully commercialize our cord blood service
offerings. The loss of such suppliers may inhibit our ability to commercialize our cord blood
service offerings.
  If our cord blood processing and storage facility or our clinical manufacturing facilities are
damaged or destroyed, our business, programs and prospects could be negatively affected.
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Our competitors may have greater resources or capabilities or better technologies than we have, or
may succeed in developing better products or develop products more quickly than we do, and we may
not be successful in competing with them.
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Due to the nature of our cell preservation activities, harm to our reputation could have a
significant negative impact on our financial condition. Damage to or loss of our customers
property held in our custody could potentially result in significant legal liability.
   The manufacture and sale of products may expose us to product liability claims for which we could
have substantial liability.
  Our success is dependent upon recruiting and retaining qualified management and other personnel.
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We may face difficulties in managing and maintaining the growth of our business.
    Our business could be disrupted or harmed and we could be subject to liability if we are unable to
operate our information systems effectively, successfully implement new technologies and protect
the confidentiality of our or our customers data.
  If we acquire other businesses or technologies the transactions may be dilutive and we may be
unable to integrate them successfully with our business, our financial performance could suffer.
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The successful commercialization of products may depend on patients and physicians obtaining
reimbursement for products from third party payers.
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We face potential liability related to the privacy of health information we obtain from research
collaborators or from providers who enroll patients and collect cord blood or human oocytes.
   Ethical and other concerns surrounding the use of stem cell therapy may negatively affect
regulatory approval or public perception of our products and product candidates, thereby reducing
demand for our products and product candidates.
  Our business involves the use of hazardous materials that could expose us to environmental and
other liability.
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Volatility of Our Stock Price.
  
    
    material public announcements;
    
    the data, positive or negative, generated from the development of our product candidates;
    
    setbacks or delays in any of our research or development programs;
    
    the outcome of material litigation or governmental proceedings;
    
    the financial results achieved by our cord blood preservation business;
    
    the impact of competition;
    
    unusual or unexpectedly high expenses;
    
    developments related to patents and other proprietary rights;
    
    market trends affecting stock prices in our industry; and
    
    economic or other external factors.
 
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 Sales of Unregistered Securities
  Use of Proceeds from Registered Securities
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Issuer Purchase of Equity Securities
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
   
 ITEM 6. EXHIBITS
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SIGNATURES
  VIACELL, INC.November 8, 2007
    
    /s/ Marc D. BeerMarc D. BeerChief Executive Officer(Principal Executive Officer)November 8, 2007
    
    /s/ John F. TheroJohn F. TheroChief Financial Officer(Principal Financial Officer)
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EXHIBIT INDEX
 No.
    
    Item10.1(1)
    
    First Lease Amendment dated as of September 11, 2007 by and
between ViaCell, Inc. and Dugan Financing LLC31.1
    
    Certification of the Chief Executive Officer pursuant to
Section 302 of the Sarbanes Oxley Act of 200231.2
    
    Certification of the Chief Financial Officer pursuant to
Section 302 of the Sarbanes Oxley Act of 200232.1
    
    Certification of the Chief Executive Officer pursuant to
Section 906 of the Sarbanes Oxley Act of 200232.1
    
    Certification of the Chief Financial Officer pursuant to
Section 906 of the Sarbanes Oxley Act of 2002
 
 (1)
    
    Incorporated by reference to the Companys current report on Form 8-K (No. 000-51110)
filed with the SEC on September 17, 2007. 49